Noteworthy week ahead for financial markets

Hi everyone,

 

Plenty to get through before looking at the week ahead and we will start with £-$ rates. Currently cable is riding the optimism wave and trading now at an 11-week high. The pair has climbed a huge 10-cents in the last 7-weeks and so represents a 'favourable' time to exchange, especially with the upcoming key events tabled. 

 

A leading data-house has today submitted their forecast for recession data among the G7 economies. It puts the UK as the first to enter a long recession and also the last to pull out of one. The reason comes down mainly to fiscal policy, which shows UK households will be more indebted than most. With interest rates expected to hit 4% early next year, we agree economic prospects look brighter elsewhere.

 

Finally, we reported a couple of weeks ago on the current size of the currency market and how much of it is traded through London lines. Well today, Bloomberg have found that Paris has overtaken London, to become Europe's biggest stock market. Domestic UK shares have been falling most of the year, whereas French domestic shares (mainly luxury brands) have been climbing. Add this to the currency movement working against Sterling versus the Euro and France now take the title. 

 

London is known as the worlds financial capital due to the market share of both currency and stock trading, light regulations, a convenient world time-zone and an English first language. It's not significant news as such, but it does damage the UK's reputation in the financial world somewhat.

 

Onto this week then and it's a crucial one for Sterling and one that pretty much sets up the remainder of the month. UK jobs data, EU GDP, UK inflation number, the Autumn Budget statement & UK retail sales all have the ability of creating volatility on release. It's a 'potent cocktail' kind of week and one that we see the Pound having more to lose than to gain. As always, when these tricky weeks occur, it's extremely important to either hedge your bets and/or create limit orders to protect your money from potential wild swings in the rate. 

 
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